Virginia Tax Commissioner Issues Ruling on Add-Back of Intercompany Expenses to Corporate Income Tax

The Virginia Tax Commissioner Aug. 21 issued a ruling regarding the addition of intercompany intangible expenses to corporate income tax. The ruling upheld that the exception to the add-back of these expenses is limited to the portion of a taxpayer’s intangible expense payments to its affiliate that correspond to the portion of the affiliate’s income subjected to tax in other states. The ruling also determined that the taxpayer’s claims of a valid business purpose and violation of the Due Process and Commerce clauses of the Constitution were not valid, as the taxpayer did not follow the proper procedure for claiming ...